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2- USA: NEW CUSTOMS REGULATIONS
3- THE 6th NFC AWARD

 

NEW CUSTOMS REGULATIONS FOR CARGO SHIPMENT TO USA

 

United States, Customs laws imposed certain requirements upon vessels that will arrive in the United States to discharge their cargo

 

By ABDUL AZIZ ARAIN
Feb 24 - Mar 02, 2003
 

 

 

 

Customers Services, Department of Treasury, USA, effective February 1, 2003 has amended the customs regulations, which require an advance and accurate presentation of certain manifest information prior to loading of cargo on board at the foreign port. This information is required in advance and is urgently needed in order to evaluate the risk of smuggling of weapons of mass destruction. Failure to provide this required information in the time period prescribed may result in the delay of a permit to unload the cargo at United States port, or may be subject to civil monetary penalties or claims for liquidated damages etc.

Under the new rules, only those licensed freight forwarders, who are registered with US Federal Maritime Commission for dealing in cargo destined for USA, are eligible to carry out advance manifestation procedure with the US Customs.

BACKGROUND

United States, Customs laws imposed certain requirements upon vessels that will arrive in the United States to discharge their cargo. Restriction has been imposed that the vessels destined for the United States must comply with their customs regulations, which requires that every vessel bound for the United States, and had to make an entry have a manifest that meets the requirements that are prescribed by the United States new customs regulation. Customs by regulation specify forms for the information and data that must be contained in the vessel manifest, as well as the manner of production for and the delivery of the vessel manifest.

Currently the master of every vessel arriving in the United States required to make entry on board the vessel a manifest for presentation on demand and to deliver to the customs. The cargo declaration is one of the documents that comprise a vessel manifest. It was required that the cargo declaration must list all the inward foreign cargo on board the vessel regardless of the intended U.S. port of discharge of the cargo. It is provided that no merchandise may be unloaded from the vessel until and unless US Customs issue a permit for its unloading. The US Customs possess a reasonable measure of regulatory discretion as to whether, and under what circumstances and conditions, to issue a permit to unload the incoming cargo under the U.S. customs rules, the requirements and conditions under which permit to unload foreign merchandise arriving in United States are listed therein.

It is also provided that failure to observe or non-compliances of the prescribed regulations under these statutory authorise the master of a vessel, who commit violation is liable for penalty of US $5,000 for the first violation and $10,000 for each subsequent violation and any conveyance used in connection with any such violation is subject to seizure and forfeiture.

 

 

ADVANCE PRESENTATION FOR VESSEL CARGO MANIFEST TO US CUSTOMS

It is now provided that for any vessel subject to entry in US, customs must receive the vessel's cargo manifest (declaration) from the carrier 24 hours before the related cargo is laden aboard the vessel at the foreign port.

NECESSITY FOR ADVANCE PRESENTATION OF VESSEL CARGO MANIFEST TO CUSTOMS

Approximately 90% of world cargo move by containers 200 million cargo containers are transported between the world's seaports each year, constituting the most critical component of global trade. About half of all incoming trade to United States (by volume) arrives by ship, and most of that in sea containers, nearly 6 million cargo containers are off loaded at US seaports. It is apprehended, there is virtually no security of a terrorist's incident using a container. It is pointed out, if terrorists used sea container to conceal a weapon of mass destruction a nuclear device and detonated it on arrival at a port.

Since there is no mechanism for identifying weapons of mass destruction before they reached but before they posed a threat to the global economy. To address the threat terrorists pose to containerized shipping, US customs is working with other governments to identify high risk cargo containers and prescreen those containers at the foreign port before they are shipped to US Containers Security Initiative (CSI) has four core elements: (1) Identify high risk containers, to detect high risk shipments a rule requiring accurate and detailed information to be transmitted before shipments are laden on vessel destined for the United States. (2) Pre-screen containers before they are shipped, to protect the US from the risks posed by international terrorists. Security screening should be done at the port of departure rather than the port of arrival. (3) Use of technology to screen high-risk containers. The new rules provide the use of technology including large-scale x-ray, gamma machines and radiation detection devices. (4) Use more-secure containers to ensure the integrity of containers screened overseas.

PENALTIES OR LIQUIDATED DAMAGES FOR FALSE OR UNTIMELY FILING OF MANIFEST DATA

If the master of a vessel failed to present or transmit accurate manifest data in the required time period or presented or transmitted any false, forged or altered document, paper, manifest or data to customs, the proposed regulations specified that monitory penalties could be assessed under the provisions. Under the new US customs rules, very minute and correct details of cargo are to be provided.

The proposed rule also provide that the carrier did not present cargo declaration information to US customs prior to the lading of the cargo aboard the vessel at the foreign port, customs could, in addition to assessment of civil monetary penalties, delay issuances of a permit to unload the entire vessel or a portion thereof until all required information was received. It is provided that the granting of preliminary entry by US customs would be conditioned upon the electronic submission of the cargo declaration either electronically or in paper form.

 

 

COST AND TIME IMPACTS ON SHIPMENT TO US

A number of liner operators have introduced a Bill of Lading Documentation Fee for shipment to US to cargo with increased administrative cost related to the advance presentation of vessel cargo manifest 24 hours prior to loading. This is an additional cost the exporters have to bear.

The other impact, besides cost, the shipping companies had to announce early documentary cut off times in connection with the US customs rules. The exporters now have to arrange the shipment at least 2 days prior to loading on vessels.

Any incomplete declaration of cargo by exporters would put the cargo on hold unless the correct details are provided by the exporters. It is suggested the exporters should communicate all requisite information and data through e-mail. Communication and corrections, if any is faster than other form of communication.

NON-VESSEL OPERATING COMMON CARRIERS (NVOCC)

Under the newly prescribed rules, this condition of the International Carriers Operating Common Carriers (NVOCC) as a manifesting party and to oblige any NVOCC having such a bond and electing to provide cargo manifest information to customs electronically to accurately transmit such information to US customs 24 or more hours before the related cargo is laden aboard the vessel at the foreign port. Breach of these obligations would result in liquidated damages against the NVOCC.

If the master of a vessel failed to present or transmit accurate manifest data in the required time period or presented or transmitted any false, forged or altered document, paper, manifest or data to US customs, the regulations now introduced specify that monetary penalties could be assessed and NVOCC be liable for the payment of this liquidated damages for the breach of this condition of the International Carrier Bond, in addition to any other applicable penalties.